What type of decisions are categorized under System Design Decisions?

System Design Decisions focus on the fundamental aspects of how an operations system will function. These decisions set the framework for how resources are organized and utilized in a business. Capacity and facility layout are critical components of system design, as they directly influence efficiency, workflow, and the ability to meet demand.

Capacity decisions involve determining how much output a system can produce, which is essential for meeting customer demand without under-utilizing or overburdening resources. Facility layout, on the other hand, involves the arrangement of physical resources in a way that facilitates efficient operations, optimizes movement, and reduces waste.

By making effective system design decisions regarding capacity and layout, an organization can effectively align its operations strategy with its overall business goals, ensuring that resources are used and managed within their designed capabilities to meet demand. This establishes a solid foundation for the overall operation, which is why this particular choice is the correct answer.